April 8, 2025 | Hinrich Foundation
Understanding how China secured its chip stack
In March 2025, a team from Peking University made waves when it announced an achievement that shattered semiconductor performance limits – without using silicon. The breakthrough, on the heels of DeepSeek, underscores China’s tech innovative capacity, undeterred by America’s tech denial strategy. Developing an effective policy campaign to preserve the West’s lead in high-end tech demands a far more robust understanding of China’s current positioning and priorities.
April 8, 2025 | Hinrich Foundation
Understanding how China secured its chip stack
In March 2025, a team from Peking University made waves when it announced an achievement that shattered semiconductor performance limits – without using silicon. The breakthrough, on the heels of DeepSeek, underscores China’s tech innovative capacity, undeterred by America’s tech denial strategy. Developing an effective policy campaign to preserve the West’s lead in high-end tech demands a far more robust understanding of China’s current positioning and priorities.
Excerpt
Semiconductors are essential for all technologies and are inherently dual-use. Their production process is comprised of three main steps: Design, fabrication, and assembly. Every step requires its own set of technological, equipment, and chemical and material inputs. No single country possesses every element of the semiconductor production stack, relying instead on a multi-step global value chain integrating the US, Taiwan, South Korea, Japan, Europe, and China. While this global division of labor is efficient, it introduces resilience concerns and geopolitical risks. For instance, Taiwan’s critical role in the semiconductor supply chain, particularly through TSMC, presents a single point of geographic failure that could shut down the world overnight.
Beijing has long prioritized resolving the risks posed by foreign dependence in the semiconductor value chain and – as part of a larger industrial offensive oriented around securing asymmetric international leverage over strategic industries – has sought both to secure indigenous domestic capabilities across the value chain and to shore up nodes of absolute global dominance. Beijing had laid out its plan on this as early as 2006, in the National Medium- and Long-Term Science and Technology Development Plan Outline issued by the State Council.
In recent years, the US and its allies have begun to make corresponding investments in securing domestic semiconductor production capability, such as the CHIPS and Science Act. On the defensive side, Washington has drastically expanded export controls on the flow of US-generated and -controlled technology to China. Despite US government interventions, Beijing has only continued to expand its capabilities and leverage. The global semiconductor layout has a dangerous reliance on China hardwired into it. And US government efforts thus far have not changed that.
Nate Picarsic is a co-founder of Horizon Advisory, a leading geopolitical and supply chain intelligence provider. Emily de La Bruyère is a senior fellow at the Foundation for Defense of Democracies (FDD), and co-founder of Horizon Advisory.